Roseville, Calif.-based Adventist Health called off plans to transfer ownership of its 72-bed Walla Walla (Wash.) General Hospital to Providence Health & Services and is instead closing the facility — along with its affiliated home health division and medical group — July 24.
Under the agreement Adventist and Renton, Wash.-based Providence Health & Services disclosed in April, Providence would assume ownership and operation of Adventist's Walla Walla campus — the hospital, Adventist Health Medical Group and Adventist Health Home Care Services. The proposed transaction was not a sale, but a "membership substitution." In exchange for the three entities, Providence agreed to disburse $14 million over 24 years into a special fund for community health that Adventist would direct.
The systems said the handoff was set to close early this summer. On Monday came word of the very outcome the deal aimed to avoid. Adventist said it encountered "unexpected regulatory challenges" that "could linger for an undetermined duration of time" and possibly block the membership substitution. It informed Providence it was discontinuing negotiations and would instead close the campus.
Joyce Newmyer, president of Adventist Health Pacific Northwest Region and board chair of Walla Walla General Hospital, said the closure is "one of the most heart-breaking decisions we have had to make as a company." The system stated that Walla Walla General Hospital has faced financial challenges for the past decade.
"Adventist Health has invested more than $68 million into Walla Walla General Hospital during recent years in the hopes of securing its future as a healthcare resource in Walla Walla," said Ms. Newmyer. "We respect the legacy of this hospital, its place in the heart of our community, and the investments we have all made to sustain it for more than a century. Unfortunately, we must now acknowledge the current healthcare environment creates an unsustainable future for the local hospital."
"We are, of course, disappointed and saddened by the decision to not continue with the proposed transaction and to close the Adventist facilities in Walla Walla, but understand and accept their decision," Providence stated.
Walla Walla General Hospital was founded in 1899 and has more than 400 employees, including a medical staff of more than 175 clinicians. With its closure, Adventist will cease hospital operations in Washington.
Adventist said it has positions open at 19 other Adventist Health hospitals in California and Oregon for employees interested in relocating.
Wheatland Village, the retirement center on Adventist's campus in Walla Walla, will remain open.